Uganda audits Uchumi dealings to ensure suppliers are fully paid

Sunday February 14 2016

Uchumi Supermarkets CEO Julius King'etich (left). Uganda has commissioned an audit of Uchumi dealings to determine how much the supermarket chain should pay to suppliers and in taxes. FILE PHOTO | NATION MEDIA GROUP

In Summary

Private Sector Foundation Uganda said that traders' claim indicated that Uchumi had not deducted taxes as required for onward submission to the government.

Uganda wants Kenyan government to intervene and ensure that Uchumi pays money owed to suppliers and Ugandan government.

The Private Sector Foundation will conduct an audit to determine how much debt Uchumi owes suppliers and the Ugandan government.

Uganda has commissioned an audit into past activities of the defunct Uchumi (Uganda) Limited over allegations that it withheld taxes amounting to millions of shillings.

The Private Sector Foundation Uganda was directed to look into the matter and compile evidence of non-remission of government taxes ahead of a planned Uganda-Kenya governments meeting where Uganda will table demands for payments of money owed to suppliers and to its government coffers.

The foundation’s communication and public relations manager, Ms Sarah Nakibuuka, said the issue arose during a meeting between the aggrieved traders and Uganda’s Trade Permanent Secretary Julius Onen.

In a statement published on the foundation’s website, they said that the traders’ claim indicated that Uchumi had not deducted taxes as required for onward submission to the government.

The foundation said the traders must provide proof in form of receipts and invoices that will be compiled and used to petition several institutions including Parliament and courts of law to coerce the Kenya government to intervene and have the debts paid as well as taxes.

Ms Nakibuuka said the entire debt owed would be known after the audit, adding that the money could rise if all the traders heed the call to forward their demand for payments through the government without fear of disclosing their own tax defaults.

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Mr Onen expressed optimism that the Uganda government would do all in its powers to ensure the traders are paid their dues for supplies to Uchumi over the past three years before the Kenyan-based retail chain abruptly closed its entire subsidiary in Uganda.

Uganda, through the private sector foundation, urged traders to list their claims and attach proof of delivery and demand for payment notes to facilitate the Kenya-Uganda government talks slated for later this month.

“The foundation is working with various former Uchumi suppliers, workers and key stakeholders to pursue both the legal and non-legal means to settle this matter and ensure that all suppliers get paid,” said a statement.

CLOSURE EFFECT

It further said the Uganda government planned to discuss the consequences of Uchumi’s closure to the suppliers and the business community as well as Ugandans who earlier worked at the four stores.

“A number of members of the private sector have been working with Uchumi Supermarket (U) Ltd which has now filed for bankruptcy. This means that once granted, it will close business in Uganda. Some 368 Ugandans were rendered jobless and Uchumi has an estimated debt obligation due to suppliers, utility bills, employee salaries and rent arrears,” it said.

The foundation expressed concern over the fate of numerous small and medium enterprises that were suppliers to Uchumi, who are currently experiencing serious cash flow challenges.

Mr Onen confirmed scheduling a meeting with his Kenyan counterpart and agreed to hold a meeting where the issue will be discussed.

“This is a matter we are now handling at a bilateral level and we have since scheduled the talks through our High Commissioner in Kenya and very soon we shall brief you on the meeting’s outcome,” he told reporters.

The Permanent Secretary spoke after meeting the affected traders and other stakeholders who expressed concern that delayed payments had adversely affected their businesses.